ADB allocates funds for studying the impact of disruptive technologies on the Indonesia economy

ADB’s technical assistance will help map the impact of
disruptive technology on the Indonesian economy, both at the aggregate and the
sector levels.

The Asian Development Bank (ADB) has approved
US$750,000 to Indonesia to provide knowledge support and technical assistance
to study the impact of disruptive technologies on the Indonesia economy.

The press release from ADB notes that the potential benefits
of the digital economy for Indonesia are projected to be significant. Indonesia
is among the fastest growing Internet markets in the world.
Indicators such as internet traffic, revenue from cloud services, and
connected devices (Internet of Things) are growing rapidly.

Indonesian online ride-hailing applications, such as Grab
and Go-Jek, are creating jobs, and they often provide better wages and
benefits, such as health insurance and access to bank accounts, compared to
more traditional jobs.

On the flip side, disruptive technologies may also pose
important risks for Indonesia in the form of potential jobs losses in certain
sectors and increase in inequality.

Winfried Wicklein, ADB’s Country Director for Indonesia said
that ADB’s technical assistance will help map the impact of disruptive
technology on the Indonesian economy, both at the aggregate and the
sector levels.

“ADB is keen to support the government’s efforts to leverage
the benefits of technology, while mitigating risks,” he added.

The government launched the "2020 Go Digital
Vision" in 2015, which aims to make Indonesia the largest
digital economy in the Association of Southeast Asian Nations (ASEAN)
region by the year 2020. It includes targets like getting 1
million fishermen and farmers to go online by 2019 to improve their access to
markets as well as information and raise their income levels.

The 14th economic reform package
issued last year included a comprehensive roadmap for promoting e-commerce. It aims
to create 1000
technopreneurs, with total business value reaching US$ 10 billion. The total
value of e-commerce is expected to reach US$130 billion. In August 2017,
the President of Indonesia signed the
country’s e-commerce
roadmap which will be a guide for the central and regional governments
to establish policy and create action plans for the acceleration of
e-commerce. It assigns responsibilities and sets key targets to be
achieved by government institutions over the next two years.

The government has also started targeted
measures and programs to promote Fintech and other technologies as part of
its strategy to reduce poverty and inequality.

Suahasil Nazara, Chairman of the Fiscal Policy Agency at
Indonesia’s Ministry of Finance, commented, “Indonesia stands at the
crossroad of global technological changes,” “Better knowledge on this fast-evolving
topic will be essential for informing enabling policy and investment
decisions.”

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